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Countdown to Obamacare: How Will My Health Insurance Change?

Editor's Note: This is the first part in a continuing series counting down to the Oct. 1 launch for new state health insurance exchanges that have been created to help people find coverage and meet the requirement for mandatory health insurance that takes effect Jan. 1, 2014.

There is a rising drumbeat of attention focused on Tuesday, Oct. 1 - the date when online state health exchanges are supposed to be up and running. While Americans will be required to have health insurance beginning next year, the exchanges, or online marketplaces, will provide early enrollment services and allow people time to shop around.

However, nothing about health insurance will actually change on Oct. 1. Consumer navigators and health care experts throughout the country are still being trained to help consumers understand the exchanges and other provisions of the law, and some exchanges say they will not really be operating as planned by that date.

Who has insurance. About 64 percent of Americans under age 65 already have private health insurance - mostly through work - according to a 2013 U.S. Census Bureau report. (Nearly all Americans age 65 and older are covered by Medicare or Medicaid.) Some employers have made well-publicized decisions to change their health insurance coverage or reduce employee access, but at most workplaces, coverage in 2014 will look a lot like coverage in 2013.

Another 16 percent of the nation's 266 million people under age 65 are publicly insured through Medicaid, Medicare or some combination of the two. Odds are, they will continue to be covered in 2014.

That leaves about 52.7 million Americans, or 1 in 5 of all people younger than 65, with no health insurance. For most of them, Oct. 1 signals a significant change. For those who want coverage, many will be able to get health insurance and qualify for hefty government subsidies. Those who don't want coverage - a group dominated by young, healthy people - will have to get it or face penalties, although the penalties will be modest next year at $95 per adult and $47.50 per child.

If you already have insurance. "People who are already insured probably aren't going to see a lot of changes," Karen Pollitz, a senior fellow at the Kaiser Family Foundation, said in a recent webcast with journalists. Employers of 50 or more people have been given until 2015 to make the biggest changes to their plans called for by Obamacare and are not legally required to comply with the law until that year.

Those with workplace coverage from smaller employers will see all required enhancements in health coverage. "Small businesses do not have to offer coverage, but if they do offer coverage, it must comply with more mandates and requirements [in 2014] than large businesses must offer," says Kevin Kuhlman, manager of legislative affairs for the National Federation of Independent Business. There is a special insurance exchange for small businesses, but it is not expected to offer many options for employers until 2015.

Coverage improvements. Improvements to coverage options will still be made next year, according to Tracy Watts, an employer health care expert with the Mercer benefits consulting firm. However,individuals will see improvements in their non-group policies and likely will experience the biggest changes in 2014 when they can buy individual policies directly from insurers or seek coverage from the new exchanges.

Major consumer enhancements to coverage next year will include guaranteed access to coverage regardless of pre-existing health conditions, no lifetime caps on insurance payments, limits on out-of-pocket maximum payments, more required insurance protections and rates that cannot be jacked up due to special health needs. Further, policies sold to individuals and employees of small businesses, whether from individual insurers or through state exchanges, must cover essential health benefits called for under the health care law.

State insurance exchanges. The state exchanges are the primary way people can gain access to coverage if they don't have employer-provided health insurance. Even if they are insured through work, it's possible the exchanges might be a better alternative for some consumers. That's because the Patient Protection and Affordable Care Act, as it's formally known, provides significant tax credits and even support payments for millions of Americans. A couple with two children, for example, could earn upwards of $90,000 a year, according to the law, and still qualify for tax credits on their health insurance.

Consumers who don't feel they need to be covered on Jan. 1 will have until March 2014 to make their selection. Even then, there is no strong mechanism to enforce compliance with the law. People currently without health insurance will largely be on the honor system in terms of signing up.

Medicaid. Another major impact of health care reform is the expansion of Medicaid to cover nearly all uninsured low-income people in states that have opted to accept the Medicaid part of Obamacare. The U.S. Supreme Court ruled last year that Obamacare was constitutional, but states could not be forced to accept the Medicaid provisions. The nation has been split on the issue, largely along political lines. According to the Kaiser Family Foundation, about half the states are moving forward with Medicaid expansion, a few are undecided and the rest are not doing so at this time.